Equities, commodities climb after China announces stimulus

By Caroline Valetkevitch

NEW YORK (Reuters) -A widely followed global stock index rose to a record high and copper prices hit their strongest level in 10 weeks on Tuesday after China unveiled stimulus measures to support its economy.

The Dow and S&P 500 eked out record closing highs as mining stocks surged. China's yuan hit a 16-month high against the U.S. dollar, and oil prices climbed to a three-week high on the news from China, the world's top crude importer.

People's Bank of China Governor Pan Gongsheng announced plans to lower borrowing costs and inject more funds into the economy, as well as to ease households' mortgage repayment burden. The announcement included a planned 50 basis point cut to banks' reserve requirement ratios.

On Wall Street, copper and lithium miners rose. Freeport-McMoRan (NYSE:FCX ) rose 7.9%, Southern Copper (NYSE:SCCO ) added 7.2%, Albemarle (NYSE:ALB ) advanced 1.97% and Arcadium Lithium climbed 3.2%.

U.S.-listed shares of Chinese firms such as Alibaba (NYSE:BABA ) rose 7.9%, PDD Holdings added 11.8% and Li Auto (NASDAQ:LI ) advanced 11.4%.

The news from China is "feeding through into parts of the U.S. market, where you see some more China-sensitive, more cyclical industries like metals and mining materials... outperforming," said Zachary Hill, head of portfolio management at Horizon Investments in Charlotte, North Carolina.

The Dow Jones Industrial Average rose 83.57 points, or 0.20%, to 42,208.22, the S&P 500 rose 14.36 points, or 0.25%, to 5,732.93 and the Nasdaq Composite rose 100.25 points, or 0.56%, to 18,074.52.

The S&P 500 briefly moved lower in early trading after data showed U.S. consumer confidence unexpectedly fell in September amid mounting worries over the health of the labor market.

Investors are looking for clues on the Federal Reserve's next move after the U.S. central bank began its latest easing cycle last week with a 50 basis point cut in interest rates.

MSCI's gauge of stocks across the globe rose 4.51 points, or 0.54%, to 844.56, and hit a record high. The STOXX 600 index rose 0.65%.

In commodities, U.S. crude rose $1.19 to settle at $71.56 a barrel and Brent rose to $75.17 per barrel, up $1.27 on the day.

Three-month copper on the London Metal Exchange climbed by 2.7% to $9,802 a metric ton by 1615 GMT after hitting its highest since July 15 at $9,825. China is a top metals consumer.

Spot gold rose 1.15% to $2,658.69 an ounce.

The Chinese yuan strengthened 0.65% against the greenback to 7.017 per dollar after reaching 7.0156 on the session.

The U.S. dollar index extended declines after the consumer confidence data.

The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, fell 0.57% to 100.35, with the euro up 0.59% at $1.1178. Against the Japanese yen, the dollar weakened 0.31% to

143.15.

U.S. Treasury yields slipped in choppy trading as U.S. data including the weak confidence numbers nudged up the possibility that the Fed could do another outsized rate cut at the November policy meeting.



U.S. rate futures have priced in a 62% chance of another rate cut of 50 bps at the November meeting, up from 54% on Monday, LSEG data showed. The more standard 25-bp easing showed a 38% probability on Tuesday.

In afternoon trading, the benchmark 10-year yield was slightly down at 3.733% after earlier hitting a three-week high of 3.81%.

Source: Investing.com